Latest news with #AGMs
Business Times
2 hours ago
- Business
- Business Times
Management booted out as Japan's shareholders flex their muscles in AGMs
[TOKYO] Japan's annual general meetings in June saw a CEO voted out and an entire board of directors replaced in a sign shareholders are increasingly holding management to account and providing impetus to regulatory moves to boost corporate value and share prices. Authorities in Japan, which is emerging from years of deflation, have ramped up calls for more proactive and vocal shareholder stewardship over the last two years - and the AGMs suggest that activists and domestic institutional investors are making the same arguments to improve corporate performance. An increasingly assertive domestic shareholder base is likely to sway management changes, investors and advisors say, providing momentum to Tokyo Stock Exchange's quest to make the world's fourth-largest economy an attractive destination for international and domestic investment. Investors are already flocking in, with the TSE's reforms helping spark a rally in Japanese stocks, which last year scaled an all-time record high and have since been buoyant. Last month chemicals firm Taiyo Holdings' chief executive officer Eiji Sato and the entire board of directors of electrical parts maker Tokyo Cosmos Electric were forced to step down. 'It's extremely rare in Japan that a boss or a board member loses his job merely because he's deeply disappointing,' said Nicholas Smith, strategist at CLSA Securities. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Whereas in the past management has typically only been forced out in cases of misconduct or fraud, the prospect of ouster for perceived poor business decisions is prompting executives and the boards of companies to change course to meet shareholder demands. 'There's no aftermarket for dud managers. There's negligible mid-career hiring and these people are lifers at their companies so all of this is quietly terrifying,' Smith said. Taiyo CEO Sato was punished for diversifying into pharmaceuticals, which had poorer margins than its core business, dismissing privatisation proposals from private equity funds and because he was deemed to be overpaid, Smith said. 'This is one of the rare cases of a CEO being ousted for corporate governance reasons rather than legal ones,' said Seth Fischer, chief investment officer at activist investor Oasis Management, which voted against Sato. Taiyo's largest shareholder DIC Corp and founding family also voted against Sato, Tokyo Shoko Research showed. 'Now management can be voted out for not making any changes and other companies are moving towards needing to do something,' Fischer added. Aligning with activists Managers have cause for concern as domestic investors adopt more stringent shareholder voting guidelines in line with the TSE's reform recommendations, which has made voting against directors more commonplace. For instance, Sumitomo Mitsui Trust Asset Management's votes against management proposals in the 12 months ended June 2024 stood at 22.1 per cent, up from 19.8 per cent the year prior. Increasingly this means domestic asset managers vote in the same way as activists. 'There's more alignment between activists and domestic shareholders on capital policy which is leaving companies with nowhere to hide,' said Govinda Finn, a governance researcher at Kobe University. 'We have an incredibly good relationship with domestic investors and increasingly engage with them to share ideas about what we think the issues at companies are,' Fischer said. The new prospect of domestic investors voting against management has prompted firms to take preventative action, said Hiroo Shimoda, senior manager at MUFJ Trust and Banking, which advises firms on shareholder relations. 'More and more companies think it would be a real problem if their domestic shareholders and activists came to be in agreement, so they rework their strategies in advance,' Shimoda said. REUTERS
Business Times
23-06-2025
- Business
- Business Times
Investors wooed with freebies at Japan's shareholder meetings
[TOKYO] More Japanese companies are giving gifts at annual general meetings (AGMs) in a practice that could increase the ranks of loyal retail investors as pressure from activist investors grows. The pickup in gifts, from collectibles to food, has been steady. A survey by Sumitomo Mitsui Trust Bank showed 11 per cent of firms offered them at AGMs in 2024, up from 4 per cent in 2021. Companies that gave cash vouchers to vote totalled more than 120 last year, five times the level in 2019, an industry group estimated. Companies are seeking to build shareholder support as activists inundate them with an unprecedented number of proposals. Meanwhile, the Tokyo Stock Exchange and the government have called for an improvement of valuations and cuts to close ties with other firms in the form of cross-shareholdings. 'The underlying idea is to increase the number of 'fan' shareholders who will hold shares over the long term and vote favourably for management,' said Mizuki Suma, head of the legal & governance team at Sumitomo Mitsui Trust Bank in Tokyo. 'When thinking of who to attract after cross shareholders go, it would be the retail investors, the fans.' Dan Castellano, a 51-year-old tech worker who has lived in Tokyo for most of his life, was disappointed when he did not see any gifts at last month's AGM of HUB, an operator of a British style pub chain. A free T-shirt or other collectible would have been nice, he said. But Castellano said he still has 25,000 yen (S$220) worth of HUB gift points that give him a strong incentive to hold its stock. The company offers the points based on the number of shares an investor holds. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'I get a HUB card for free drinks which I basically use to treat my friends and to kind of show off my shareholder status,' said Castellano, a follower of Warren Buffett's strategy of investing in understandable businesses. 'I like attaching myself to the company and being a shareholder is a way to do that.' Retail investors tend to vote in favour of the management, said Kunio Marutani, a researcher at Mitsubishi UFJ Trust & Banking Corporation. Some firms hope that through exercising voting rights, individual shareholders will develop a sense of participation in management and hold shares for the long term, he said. While some analysts point out that focusing on shareholder loyalty could distract management from improving corporate governance, the practice may get first-time equity holders more interested in the company's business. Takahiro Shinozaki, a 30-something construction professional who has attended dozens of AGMs in the past, said the meetings give him a chance to learn more about the companies. Shinozaki said he votes for management 90 per cent of the time. 'It's important to promote the right to participate in management decisions through the gift vouchers they provide,' said Shinozaki, who often takes a half-day off to attend AGMs. 'The proportion of individual shareholders will increase more and more in the future, and retail investors will have a lot more impact.' BLOOMBERG
Time of India
19-06-2025
- Business
- Time of India
Air India crisis: Chandra skips Tata Consumer AGM
Representative Image MUMBAI: Tata Consumer Products chairman N Chandrasekaran skipped the company's annual shareholder meeting on Wednesday due to exigencies. Non-executive director P B Balaji presided over the meeting in his stead. Regulations permit another director to lead the meeting when the board chairman is unavailable. Chandrasekaran's absence was due to his focus on Air India matters following the crash of London-bound flight 171 in Ahmedabad last week, which resulted in over 270 fatalities. At the meeting, company secretary Delnaz Dara Harda said, "The chairman of the board, N Chandrasekaran, will not be able to attend the AGM due to some exigencies." Tata Consumer initiated the annual general meeting sequence among major Tata Group companies, with TCS scheduled for Thursday and Tata Motors for Friday. It remains to be seen whether Chandrasekaran, who is also the chairman of both these companies, will chair the AGMs. According to a lawyer, if the chairman is not present within 15 minutes after the time appointed for holding the meeting, or if he is unwilling to act as chairman of the meeting, the directors present can elect a chairman among themselves. Chandrasekaran has been in Gurugram-Delhi, engaging with Air India personnel, holding discussions with civil aviation minister Ram Mohan Naidu and aviation secretary Samir Kumar Sinha; and addressing various airline-related matters. His office also sought time with DGCA chief Faiz Ahmed Kidwai. During the AGM, Balaji, who is also the CFO of Tata Motors, acknowledged the challenging period for the Tata group. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
17-06-2025
- Business
- Mint
Activist Investors Flood Japanese Firms With Record Proposals
Activist investors are inundating Japanese companies with an unprecedented number of proposals that will keep executives on their toes at annual general meetings. Firms have received a record 137 requests from activists, according to data compiled by Mitsubishi UFJ Trust & Banking Corp. The shareholders are delving deeper into management decisions and demanding changes to board structures and privatizations. The country's jammed AGM season matters more than ever this year as investors seek signs that Japanese stocks - which have underperformed most major markets this year - can get out of a rut. The proposals are putting added pressure on management to deliver tangible growth strategies, rather than simply turning to the quick fix of more buybacks or dividends. 'With new activist holdings being revealed each day, companies are paying extra attention to governance and capital efficiency,' said Rieko Otsuka, a strategist at MCP Asset Management Japan Inc. 'There's a sense of impending crisis among management about when they might be targeted,' she said. The season peaks next week with more than 40% of listed companies - that's over 1,700 firms - set to hold AGMs. They will be at venues including the luxury Palace Hotel near the Emperor's residence, and the Ariake Arena which was built as a venue for the Tokyo 2020 Olympics. Some executives are readying for drawn-out meetings as overall proposals from activists and other shareholders have increased to almost 400, according to Mitsubishi UFJ Trust. That's well over double the number a decade ago. In contrast in the US, total proposals this year fell 14% through May 13 compared with the January-June period last year, as investor demand declined for environmental and social issue-related changes, according to a report from ISS-Corporate based on Russell 3000 index companies. Read: Activist Investors Set Record With $6.6 Billion Spree in Japan Activist investors typically acquire a significant stake and then exert pressure on a firm to influence how it's run, suggesting the increasing presence of these shareholders in Japan may be key to driving pro-growth strategies. Here's a look at some AGM proposals: The scrutiny in Japan is important right now because it may help carve out a path for corporate growth amid a worsening business climate as tariffs upended key sectors of the economy. Gains in Japanese stocks have been limited this year, raising the risk that the Topix Index's two-year rally is over. Read: Dalton Allies With Murakami-Linked Fund to Shake Up Fuji Media 'We get to vote once a year, so it's important and I think probably more than other cultures, voting against the president or the chairman sends a pretty clear message,' said Carl Vine, co-head of Asia-Pacific equities at M&G Investments, whose holdings include Toyota Motor Co. and Seven & i Holdings Co. Even so, proposals aimed to improving shareholder returns still make up a large chunk of activists' requests, and that may provide a short-term boost to the market as deep-pocketed companies pour more cash into buybacks. Read: Japan Calls On Companies to Find Value Beyond Share Buybacks In addition, activist proposals rarely get passed because of opposition from domestic investors, who tend to be quite conservative. Still, the increase in proposals comes at an unfortunate time for executives who can no longer rely as much as on cross-shareholders. The waning influence of this cohort, also known as stable or policy shareholders, may increase the clout of institutional investors at proxy fights. This puts the focus more on companies with low approval ratings and 'opens up the possibility that maybe a new shareholder would come in and try and put additional pressure on management,' said Bruce Kirk, chief Japan equity strategist at Goldman Sachs Japan Co. All this means that AGMs are now a far cry from how they were conducted before Japan's corporate reforms kicked in and the market caught the attention of overseas investors. 'There was a time when decisions were made at AGMs in a planned, harmonious, and ritualistic manner, just for the sake of it,' said Hidenori Yoshikawa, chief consultant at Daiwa Institute of Research, a Tokyo-based think tank. 'Now, until the meeting ends, we don't know how it will turn out.' This article was generated from an automated news agency feed without modifications to text.
Indian Express
11-06-2025
- Indian Express
Need to extend surveillance envelope, says deputy air chief
Operation Sindoor has thrown up the lesson that modern warfare has fundamentally altered the relationship between distance and vulnerability, thanks to technology, a top military officer said Wednesday, while also highlighting critical importance of deep surveillance in contemporary warfare. Chief of Integrated Defence Staff, Air Marshal Ashutosh Dixit said the existing principles of war are being challenged and new ones are emerging. 'Earlier, the horizon marked the limit of immediate threat. Today, precision-guided munitions like SCALP, BrahMos and HAMMER have rendered geographical barriers almost meaningless, as strikes with BVR AAMs (beyond visual range air to air missiles) and supersonic AGMs have become commonplace,' he said at a seminar hosted by think-tank CAPS (Centre for Air Power Studies) and Indian Military Reviews (IMR). He said when weapons can strike targets hundreds of kilometres away with pinpoint accuracy, the traditional concepts of front, rear and flanks, combat zones and depth areas all become irrelevant. 'What we call the front and the theatre, merge into one. This new reality demands that we extend our surveillance envelope far beyond what previous generations could have even imagined,' he said, adding that we must detect, identify and track potential threats not when they approach our borders, but when they are still in their staging areas, airfields and bases, deep within adversary territory. 'This existed as a concept even earlier but today we have the means to realise it,' he said. 'When hypersonic missiles can traverse hundreds of kilometres in minutes and drone swarms can reach their targets before traditional decision-making processes can respond, real-time or near-real-time surveillance becomes… essential for survival.'
